Australian rental prices have hit a new record high accelerating well past household incomes and a chronic shortage drives a \u201cprofound shift in affordability\u201d.<\/p>\n
Just how high prices have risen depends on which analysts you ask, but what they agree on is the chronic shortage of rentals and recent property tax changes point to a worsening situation.<\/p>\n
Critics of the federal government\u2019s May budget, which scrapped negative gearing and tweaked capital gains tax for investors, had warned it could drive rents up as landlords exited the market.<\/p>\n
<\/p>\n
It might still be too early to see those impacts but Cotality data released on Thursday put the median national rent at $705 per week at the end of June, a growth rate of 5.9 per cent in the last 12 months and 40.6 per cent over the past five years.<\/p>\n
Meanwhile realestate.com.au found the median price at the end of the June quarter was $670 per week, a \u201crecord high\u201d it said was 6.4 per cent higher than the same time in 2025.<\/p>\n
Realestate.com.au\u2019s latest Market Insight report found renters were paying $12,480 more on average in June 2026, compared to five years ago. <\/p>\n
\u201cDespite Melbourne and Perth outpacing its growth this quarter, Sydney remains the most expensive capital for renters,\u201d it reported.<\/p>\n
Across the capital cities, rent prices lifted 2.1 per cent over the June quarter, to sit 6.2 per cent higher than a year ago at $690 per week \u2013 a $10 jump on the March quarter. <\/p>\n
All capital cities recorded a rent price rise over the June quarter, though Melbourne and Perth led the gains 3.5 per cent. <\/p>\n
REA Group economist Luc Redman said national rents \u201creached a new high in the June quarter, with widespread price growth across the capitals\u201d. <\/p>\n
\u201cThe rent increases occurred despite a small increase in the rental vacancy rate over the same period,\u201d he said.<\/p>\n
\u201cThe May federal budget which announced sweeping changes to investor tax settings, occurred in the middle of the quarter, so the full impact on the rental market is yet to be seen.<\/p>\n
\u201cWhile the vacancy rate has edged higher, the expected decrease in investor demand due to the budget\u2019s tax changes could slow the pace of new supply, putting further pressure on rents.\u201d<\/p>\n
House values have taken a hit this year as a combination of inflation, interest rate rises and the new property tax settings cool demand in the market.<\/p>\n
Property analytics group FoundIt last month revealed a drop in the number of new landlords entering the market, coupled with continued property sales from existing investors.<\/p>\n
Sydney now had fewer rental homes than before the tax changes were made, it found, with about 2159 rental bedrooms added to the over May but 3744 rental bedrooms sold.<\/p>\n
Cotality recorded a slight easing of growth over the June quarter (1.6 per cent) compared to March (2.1 per cent) but said Australian renters were now paying $204 more per week on average than in 2021 on its calculations.<\/p>\n
\u201cWe are seeing a profound shift in affordability across the market,\u201d Cotality Australia\u2019s head of research Gerard Burg said. <\/p>\n
\u201cIn March this year, the typical household was allocating roughly one-third of their gross income to rent, compared to around 27 per cent just five years ago.<\/p>\n
\u201cWhile quarterly rental growth has eased slightly, the underlying supply deficit means conditions remain incredibly challenging for tenants.<\/p>\n
\u201cWe are approaching a threshold where rental affordability acts as an increasing constraint on further growth, particularly in regional areas where lower median incomes mean households are spending upwards of 35 per cent of their income on rent.\u201d<\/p>\n
Cotality found Sydney remained the most expensive capital city, with a median rent of $841 per week in June, but rapid growth in Perth ($784) and Brisbane ($734) had closed the gap. <\/p>\n
Melbourne was the lowest of the mainland capitals, and $200 a week cheaper than Sydney at $641.<\/p>\n
Houses rose 1.7 per cent over the quarter while units went up 1.2 per cent, a divergence from the previous quarter when apartment rents outpaced houses.<\/p>\n
It comes as renters face historically low vacancy rates sitting at 1.6 per cent nationally and below 2 per cent in every capital city.<\/p>\n
Sydney and Brisbane\u2019s vacancy rates of 1.9 per cent was the highest of the big cities while Adelaide\u2019s market was the tightest at just 1 per cent.<\/p>\n
\u201cWith vacancy rates compressed so tightly, tenants are left with very little leverage,\u201d Mr Burg said.<\/p>\n
\u201cCapital city rents rose faster than regional markets this quarter, reversing a trend of regional outperformance seen between late 2024 and early 2026, largely because regional markets are hitting severe affordability ceilings.\u201d<\/p>\n
Cotality found the total number of rental listings had remained low, sitting around 16.7 per cent below the five-year average. <\/p>\n
Darwin was the tightest market, sitting 26.1 per cent below average, followed by Sydney at 24.1 per cent and Melbourne at 18.4 per cent.<\/p>\n
It also noted rental yields were on the rise, reflecting the growth in demand, and home values fell over the past quarter. But it pointed out few landlords had positively geared rentals.<\/p>\n
\u201cGiven the changes to investor taxation policy in this year\u2019s federal budget, most notably in this case the removal of negative gearing for purchases of existing housing stock from 1 July 2027, it is worth noting that gross yields remain well below the cost of capital and that there are relatively few locals around the country that could be positively geared based off typical rates of leverage,\u201d its report states.<\/p>\n
SQM Research last month reported a national vacancy rate of 1.2 per cent, which managing director Louis Christopher said was \u201cexceptionally low by historical standards\u201d.<\/p>\n
It reported rental asking prices had increased 7.8 per cent over the 12 months to June, even higher than both Cotality and realestate.com.au\u2019s analysis.<\/p>\n
\u201cAustralia\u2019s rental market remains fundamentally undersupplied,\u201d Mr Christopher said.<\/p>\n
\u201cWithout a substantial increase in housing construction and rental stock, and\/or a meaningful decrease in population growth rates from current levels, affordability pressures are likely to persist through the remainder of 2026 and into 2027.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Australian rental prices have hit a new record high accelerating well past household incomes and a chronic shortage…\n","protected":false},"author":2,"featured_media":541011,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-541010","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/541010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=541010"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/541010\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/541011"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=541010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=541010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=541010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}